Chemical company KMG Chemicals Inc. (NYSE: KMG) has reached a deal with Arsenal Capital Partners to acquire Flowchem, a manufacturer of pipeline performance chemicals. The deal is valued at $495 million in cash, including working capital of approximately $17 million.
Flowchem, founded in 2001, provides drag-reducing agents (DRA) and equipment used to reduction friction near pipeline walls and within the turbulent fluid flowing through pipeline network. The Waller, Texas-based target manufactures chemical products that help optimize pipeline flow and reduce pipeline operating costs. One of the largest DRA providers globally, Flowchem serves more than 50 pipeline operators, as well as midstream service providers and distributors.